which of the following increases liabilities but not assets?\na. taking out a loan to buy a new car\nb…
which of the following increases liabilities but not assets?\na. taking out a loan to buy a new car\nb. taking out a loan to go on vacation\nc. using a credit card to buy a computer\nd. paying off a student loan\nplease select the best answer from the choices provided\na\nb\nc\nd
Answer
Brief Explanations:
- Option a: Taking out a loan (liability increases) to buy a new car (asset increases).
- Option b: Taking out a loan (liability increases) to go on vacation (no asset is acquired as vacation is a consumption expense).
- Option c: Using a credit card (liability increases) to buy a computer (asset increases).
- Option d: Paying off a student loan (liability decreases).
Answer:
B. Taking out a loan to go on vacation